National Overview
As of June 2025, the UK housing market is showing signs of steady recovery, with average house prices across the country increasing by 1.6% compared to the previous year, bringing the average house price to £268,000. This positive trend reflects growing buyer confidence and improved affordability, with mortgage rates remaining relatively stable after recent adjustments by the Bank of England. The market is benefiting from the rebound in consumer demand, especially in areas with strong local economies and desirable locations.
Despite some global economic uncertainty, UK buyers are proving resilient, continuing to move forward with property purchases. The housing market is particularly buoyant in the northern regions, where demand for housing is outpacing supply, resulting in noticeable price increases in several key areas.
Regional Highlights: Strong Growth in the North
The biggest gains in house prices have been seen in the North West and North East of England. These regions are experiencing house price growth of 1.5% and 1.4%, respectively, as demand for homes in these areas continues to increase. A combination of relatively affordable housing stock and strong local employment opportunities is making these regions increasingly attractive to buyers, especially those seeking more space for their money. The rise of flexible working arrangements has also contributed to this shift, as more people are moving away from the high-cost areas of the south in search of better value properties.
In particular, cities like Manchester, Liverpool, and Newcastle are seeing significant demand, driving up prices as more people look to make these urban areas their home. The northern property market is expected to remain strong as demand continues to exceed supply, making it a seller's market in many regions.
London and the South: Slower Growth
In contrast, London and the wider South East have seen more tempered price increases. London, in particular, is experiencing slower growth, with prices rising by 1.2% annually, which is lower than the national average. This slow growth is attributed to a combination of factors, including higher living costs, global economic uncertainties, and affordability challenges in the capital. With many buyers priced out of the market, the focus has shifted towards more affordable options outside of central London, particularly in commuter belt areas like Basingstoke, Reading, and Bracknell.
The South East has mirrored London’s slow growth, with many buyers now favouring smaller towns and cities where housing is more affordable and offers more space. This trend is expected to continue in the short term, with property prices in these regions rising at a more gradual pace compared to the northern parts of the UK.
Property Type Trends: Buyer Preferences Shift
In terms of property types, semi-detached and terraced houses are seeing the most significant price increases. These types of homes are becoming increasingly popular due to their affordability and versatility. Semi-detached homes have seen a price increase of 0.7%, while terraced houses have seen a rise of 0.8%.
Meanwhile, detached homes and flats/maisonettes are experiencing slight declines, with detached houses down by 0.5% and flats dropping by 1.1%. This shift is largely due to buyer preference for more affordable and practical housing options in the wake of rising living costs. Buyers are prioritising properties that offer more flexibility and are more cost-effective, reflecting the changing economic landscape.
Market Outlook: What to Expect in the Coming Months
Zoopla’s forecast for the remainder of 2025 predicts a modest increase in house prices of 2.5% by the end of the year. While price growth is expected to remain subdued in the South, regions in the North will continue to outperform the rest of the UK, with strong demand ensuring that these markets remain competitive.
The outlook for buyers and sellers is positive, but it’s crucial to keep in mind that competitive pricing will be key. Sellers should aim to price their properties competitively to attract buyers in a market that remains high in demand, especially in the north.
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